Labor Supply, Child Care, and Welfare in Spanish Households

Article excerpt

INMACULADA GARCIA AND JOSE ALBERTO MOLINA [*]

This paper presents a household model in which both spouses work and care for their children, thereby obtaining a measure of household welfare. Applying this model to the Spanish case allows for drawing some basic conclusions. That is, the highest efficiency in caring for children is obtained when time is offered by the mother. Moreover, the time dedicated to child care by the father is considered as leisure time in a higher proportion than time dedicated by the mother. Also, a direct and strong relationship is detected between monetary income and welfare. Household welfare is greater when the children are older, and welfare increases when the father dedicates less time to work outside the home. (JEL J22, J13, I31)

Introduction

Traditionally, literature devoted to analyzing household labor supply is based on maximization utility models which consider that the available time of each spouse in a family is allocated between work time and leisure time. One problem with this type of model is that it does not include other family activities that consume time, for example, the production of goods and services within the household. In this context, Becker [1965] formulated the household production function which considers that the goods and services bought in the market are not directly consumed. Rather, they are productive factors. Together with time, they are used in a productive process carried out in the household, and they generate the goods and services that give utility to the family. Other papers that consider the theoretical and empirical aspects of household production theory are Michael [1972, 1973], Gronau [1977, 1986], Rosenzweig and Schultz [1983], Graham and Green [1984], Al-Ghannam [1993], and Apps and Rees [1996].

In recent decades, the majority of western countries have noted important changes in time allocation among the different activities of each family member. The traditional pattern of behavior is characterized by the husband devoting a great part of his available time to work outside the home and the wife devoting her time to housework. However, this pattern no longer prevails in the majority of families. Now, the wife actively participates in the labor market, whereas the husband devotes a part of his time to housework. Thus, both spouses participate in activities inside and outside the home. This change is caused by social, technological, and economic factors and leads to households where each spouse is no longer a specialist in one particular activity. Therefore, there are no a priori differences between husbands and wives when they distribute their available time between housework and paid work.

In this context, this paper studies the activity of Spanish husbands and wives in the labor market and in the time they devote to child care. It also analyzes the specialization of each spouse in families where both spouses work outside the home. The influence of these activities on household welfare is also studied. To that end, a family labor supply model is presented in which the household production function allows for obtaining care and education for the children as an output, considering that a particular percentage of the time devoted to this activity can be taken as leisure time. Once the labor supply and the child care functions for both spouses are derived, the equivalent income is obtained as a household welfare indicator. This measure allows for comparing the welfare level of families with different socioeconomic characteristics. Thus, determination can be made of the influence over the household welfare of male and female worked time, leisure time, and child care time, as well as the monetary in come and some sociodemographic variables. These include, for example, household size, the education level of the parents, or the existence of other family members who care for the children. The model is estimated using Spain's statistical information from the "Encuesta de Estructura, Conciencia y Biografia de Clase" (ECBC) [1991]. …